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Cocktail Costing and Pricing Guide

When calculating the cost of a cocktail, all ingredients and materials must be included. The cost of each ingredient is calculated based on the proportion of that ingredient used in the cocktail compared to its total volume or weight purchased. Establishments then set a desired liquor cost percentage, typically around 35%, to determine the selling price of the cocktail by marking up the total cost so it covers overhead costs and provides a profit margin. For example, if a Pina Colada's ingredients cost $12.06 total and the desired liquor cost percentage is 35%, then the selling price would be $12.06 divided by 0.35, which is $34.45.

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Dickson Chan
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139 views2 pages

Cocktail Costing and Pricing Guide

When calculating the cost of a cocktail, all ingredients and materials must be included. The cost of each ingredient is calculated based on the proportion of that ingredient used in the cocktail compared to its total volume or weight purchased. Establishments then set a desired liquor cost percentage, typically around 35%, to determine the selling price of the cocktail by marking up the total cost so it covers overhead costs and provides a profit margin. For example, if a Pina Colada's ingredients cost $12.06 total and the desired liquor cost percentage is 35%, then the selling price would be $12.06 divided by 0.35, which is $34.45.

Uploaded by

Dickson Chan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Cocktail costing

When calculating the cost of a cocktail, all ingredients must be included. That is, the alcohol,
juice, cream and garnishes – anything in the recipe that has a cost to the establishment. For
example, consider a Pina Colada. This calls for:

30 ml White rum
30 ml Malibu coconut liqueur
60 ml Pineapple juice
15 ml Cream
1 scoop Crushed ice

Pineapple pieces

All items, including the pineapple and cream must be included.

The cost of each item in the cocktail is calculated as a proportion of the cost of the way the item
is normally purchased. The table below illustrates this.

Cost – Pina Colada


Ingredient Quantity Cost of Volume/ Proportion Cost of
Purchased Quantity Weight in of Cost of Ingredients in
Purchased Cocktail Purchase Cocktail
White rum 750 ml $128.00 30 ml 30/750 = 0.04 x
0.04 $128.00=
$5.12
Coconut 700 ml $130.00 30 ml 30/700 = 0.043 x
liqueur 0.043 $130.00=
$5.59
Pineapple 1 litre $11.10 60 ml 60/1000 = 0.06 x $11.10=
juice 0.06 $0.666
Cream 600 ml $11.60 15 ml 15/600 = 0.025 x
0.025 $11.60=
$0.29
Pineapple 1 kg $13.80 50 gm 50/1000= 0.05 x $13.80=
pieces 0.05 $0.69
Ice – – – – 0
Total Cost $12.06
Cocktail pricing
Knowing the cost of a cocktail is fine, but to sell it at this price would be foolish. This cost does
not cover overheads such as wages, electricity, rent etc. Nor does it include a sensible profit
margin.

To remedy this, establishments set ‘desired liquor cost percentages’. This value, which is
typically 35%, （一杯計） is used to calculate the selling price of cocktails and other beverages
in the bar. （overall, 15-18% include all beverages in restaurant, e.g coffee, softdrink……）

A desired liquor cost percentage of 35% means that the cost of any beverage is 35% of its
selling price. That is:

Beverage cost ÷ Selling price = 35%

This formula can be rearranged so that it enables the establishment to calculate a suitable
selling price if the cost of the beverage is known. That is:

Selling Price = Beverage cost ÷ Desired liquor cost percentage

For example, if desired liquor cost percentage is 35%, ie 0.35, and the ingredients for the Pina
Colada cost $12.06, then:

Selling price = $12.06 ÷ 0.35 = $34.45

EXAMPLE:

Cost –
Ingredient Quantity Cost of Volume/ Proportion Cost of
Purchased Quantity Weight in of Cost of Ingredients in
Purchased Cocktail Purchase Cocktail
spiced rum 1000ml 200 60ml 12

Apple cider 1320 ml 58.9 30ml 1.3

Cinnamon 700ml 130 22ml 4.1


syrup
bitters 750ml 158 0.625ml 0.1

lemon juice 200ml 15 15ml 1.1

cinnamon 100g 15 3g 0.45


sticks
Ice – – – – 0
Total Cost 19.5
Selling Price 55.7

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